Dairy rebound boosts economic growth

Rebounding dairy production drove a 1.4
percent increase in gross domestic product (GDP) for the
September 2013 quarter, Statistics New Zealand said today.
This increase in GDP is the largest since the December 2009
quarter.

The strong increase in dairy production was the
main contributor to a 17.0 percent rise in agriculture,
which makes up about 5 percent of the New Zealand
economy.

"Dairy farming has really bounced back from the
drought this year," acting national accounts manager Steffi
Schuster said. "The increase in agriculture is the largest
in more than 25 years, as good weather boosted production
well above the weak June quarter."

Dairy product
manufacturing also increased this quarter, which contributed
to a 1.5 percent rise in total manufacturing. While
manufacturing production was up, exports of dairy products
fell this quarter, leading to a build-up of inventories. The
$770 million increase in total inventories this quarter is
the largest buildup since the series began.

Increases in
agriculture and manufacturing production were partly offset
by declines in:

• Construction (down 1.0 percent), as
falls in infrastructure and commercial construction
outweighed an increase in housing construction. Investment
in housing was up 8.5 percent from the previous
quarter.• Business services (down 0.8 percent), with
most sub-industries down, except for architectural and
engineering services.

Economic activity for the year ended
September 2013 was up 2.6 percent.

The expenditure measure
of GDP was up 1.1 percent in the September 2013 quarter. The
main movements were:

• Investment in fixed assets (up
3.1 percent), driven by increased imports of plant,
machinery, and equipment. This was also reflected in a 4.5
percent rise in imports of goods and services.•
Build-ups in manufacturing and distribution inventories, as
supply of goods exceeded demand this quarter.• Volume
of spending by New Zealand households (up 0.4 percent),
mainly due to increased spending on durables like furniture
and motor vehicles.Visit Gross
Domestic Product: September 2013 quarter

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